Session Agenda

• Chapter 1 – Marketing: Creating Customer

Value and Engagement
• Class Activity

1
Class Activity
• Our task in this exercise is to construct our
own definition of marketing. To assist in this
regard, some different views of what marketing
have been presented.
• Review the various views/definitions of
marketing in the conversation. Then see if you
can come up with your own definition of
marketing (based on some of these views and
your general understanding of marketing).
• Try not to use a standard textbook definition –
instead see if you can construct a suitable
definition of marketing in your own words.
Vicki: To me the answer is pretty straightforward – marketing is all about
working out how you can get consumers to buy more products from
your firm.
Susie: That’s fine, but how do you actually do that? I think marketing is the
various tasks that you undertake to get consumers to buy more, such
as having special offers and developing great new products.
Natalie: But is it just about getting people to buy more? For instance,
McDonald’s could get people to buy more Big Macs if they started
selling them for only $1 – I’m not sure that they would really want to
do that.
Paul: No they wouldn’t – they would want to increase profits, not sales.
That’s why in their marketing they train their staff and continuously
open more stores, which have lots of seating and parking, as well as
having playgrounds and drive-thrus. At McDonald’s, their marketing
all about convenience and service.
Mitchell: Sure, McDonald’s do all that, but they focus on value as well. For just
$6 you can get a burger combo. So I think that a key part of
marketing is having a low price.
Jay: But hang on a bit, there are firms that like to charge high prices. For
example, with an expensive restaurant, having high prices is a sign of
the quality of the food and their service.
Mike: And those types of restaurants don’t even need to advertise. They gain
new customers through their reputation and word-of-mouth.
Bianca: You know what you’re talking about is having a strong brand. That’s what
I think marketing is all about. A good example is BMW. Their cars are a
status symbol, so people are willing to pay more to own one.
Barry: So what you’re saying is the key to marketing is lots of advertising in
order to build a strong brand so consumers will pay more and buy more.
Julie: But isn’t it more than just advertising? To build a strong brand, don’t you
need to start with a good product first? There’s no point advertising
something that people won’t buy again. So I think marketing starts with a
good product.
Charlie: But to have a good product, you first have to understand the customer
and their needs. If you do that right, then you know what products they
want, how much they will pay, and how to advertise. So I think the key to
marketing is truly understanding the consumer and meeting their needs.
What Is Marketing?

Marketing is a process by which companies

create value for customers and build
strong customer relationships in order to
capture value from customers in return.

Simply put: Marketing is engaging customers

and managing profitable customer
relationships
Marketing Trends in 2020
Marketing: Creating Customer Value and Engagement

Chapter Objectives
• Objective 1Define marketing and outline the steps in the
marketing process.
• Objective 2Explain the importance of understanding the
marketplace and customers and identify the core marketplace
concepts.
• Objective 3Identify the key elements of a customer-driven
marketing strategy and discuss the marketing management
orientations that guide marketing strategy.
• Objective 4Discuss customer relationship management and
identify strategies for creating value for customers and capturing
value from customers in return.
1-7
• Objective 5Describe the major trends and forces that are
changing the marketing landscape in this age of relationships.
 What Is Marketing?
The Marketing Process

1-8

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Understanding the Marketplace and
Customer Needs
Customer Needs, Wants, and Demands

Needs • States of deprivation

Wants • Form that needs take

• Wants backed by
Demands buying power
1-9

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Inc.
 Understanding the Marketplace and
Customer Needs
• Market offerings are some combination of
products, services, information, or
experiences offered to a market to satisfy a
need or want.
• Marketing myopia is focusing only on
existing wants and losing sight of underlying
consumer needs.

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1-10
MATTEL BRINGS BARBIE CAMPAIGN TO
LIFE
Mountain Dew And Careem Brought A
Thrilling Desert Experience In Lahore
Understanding the Marketplace and
Customer Needs

1-
13

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Designing a Customer Value-Driven
Marketing Strategy
• Marketing Management Orientations
1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Societal Marketing concept

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 Applicative Scenarios – Test your
knowledge
• As Herb Kelleher, Southwest Airlines' colorful CEO, puts it, "We don't
have a marketing department; we have a customer department."
• McDonald's and Burger King still cook their fried foods in oils that are
high in artery-clogging trans fats. Such unhealthy fare, the critics claim,
is leading consumers to eat too much of the wrong foods, contributing
to a national obesity epidemic. What's more, the products are wrapped
in convenient packaging, but this leads to waste and pollution.
• Computer maker Lenovo dominates the highly competitive, price-
sensitive Chinese PC market through low labor costs, high production
efficiency, and mass distribution.
• Manufacturers of unsought goods, such as blood donations, tracks
downs prospects and sell them the product benefits to “make a sale”
• Some manufacturers believe that if they can "build a better mousetrap,
the world will beat a path to their door."
Follow-Up Questions
• Which of the five marketing management
orientations depict/give rise to marketing
myopia? Which one(s) avoid it? Justify your
stance.
Designing a Customer Value-Driven Marketing
Strategy
• Market segmentation refers to dividing the markets
into segments of customers.
• Target marketing refers to which segments to go
after.

1-19

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Building Customer Relationships
Customer Relationship Levels and Tools

Frequency
Basic Relationships Full Partnerships
Marketing
– low-margin – high-margin
Programs –
customers customers
reward customers

1-18

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Building Customer Relationships
• Consumer Engagement: It is a business
communication connection between an external
stakeholder (consumer) and an organization
(company or brand) through various channels of
correspondence
Building Customer Relationships

Consumer-Generated Marketing
Brand exchanges created by consumers
themselves—both invited and uninvited—by which
consumers are playing an increasing role in
shaping their own brand experiences and those of
other consumers.

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Inc.
Lipton weaves threads of hope amidst
Covid-19 with its new campaign
• Most of the footage in the film has been shot by
people themselves.
Capturing Value from Customers

Creating Customer Loyalty and Retention

Customer lifetime value is

the value of the entire
stream of purchases that
the customer would make
over a lifetime of
patronage.

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Inc.
Capturing Value from Customers

Building Customer Equity

Customer equity is
the total combined
customer lifetime
values of all of the
company’s
customers.

1-
23

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Capturing Value from Customers
Building Customer Equity

Building the Right Relationships with the Right

Customers

FIGURE 1.5
Customer
Relationship 1-24

Groups
The Changing Marketing Landscape
• Digital and social media marketing
• Not-for-profit marketing growth
• Rapid globalization
• Sustainable marketing

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Predict the future!
• In the 1970s and 1980s, Cadillac had some of the
most loyal customers in the industry. To an entire
generation of car buyers, the name "Cadillac"
defined American luxury. Cadillac's share of the
luxury car market reached a whopping 51 percent in
1976. Based on market share and sales, the brand's
future looked rosy. However, Cadillac customers
were getting older (average age 60) and many
Cadillac buyers were on their last car. On the other
hand, BMW with its more youthful and vigorous
image didn't win the early market share war.
However, it did win BMW younger customers.
Answer
• In the years that followed, BMW's market
share and profits soared while Cadillac's
fortunes eroded badly. Thus, market share is
not the answer. We should care not just
about current sales but also about future
sales. Customer lifetime value and customer
equity are the name of the game.
Recognizing this, Cadillac is now making the
Caddy cool again by targeting a younger
generation of consumers
Class Activity
• Please Refer to the Word File